And that means it’s unlikely that American motorists will see any relief at the pump for the foreseeable future. With profit margins at record levels, U.S. refineries have boosted production to 94.9 percent of capacity, according to the U.S. Dept. of Energy’s weekly report.

Gasoline inventories rose by 1.3 million barrels last week, but they’re still below the 5-year average level for this time of year. And as demand continues to build entering the summer driving season, Americans are already burning through 9.3 million barrels of gasoline a day, up from 8.5 million barrels at this time last year, according to the latest Energy Dept. figures.

"Gasoline prices are still going to stay high," said Jamal Qureshi, an analyst at Washington-based PFC Energy.

One big reason pump prices are stuck above $2 a gallon is that crude oil represents roughly half of the cost of a gallon of gas. And demand for crude — which typically eases in the spring — has surged much faster than expected. That’s because, after years of sluggish growth, the global economy is suddenly firing on all cylinders.

“We’ve got a global synchronized recovery here — in Europe, the United States and in Japan,” said Scott Wren,Senior Equity Strategist at A.G. Edwards. “The wildcards are China and India, certainly. We haven't had an expansion on a global basis like this when we have had all of those participants. So demand for oil is going be strong.”

Despite that heavy demand, crude oil inventories are building. Commercial stockpiles swelled by 2.8 million barrels to 301.7 million barrels in the week ended May 28, bringing them to the highest level since August, 2002. That lead many analysts to suggest that OPEC — especially Saudi Arabia — has been quietly increasing production for the past few months, since it can take 6 to 8 weeks for that increased output to reach U.S. ports.

That’s one reason oil markets shrugged off the news Thursday that OPEC, as expected, had agreed to raise its official production quotas. The cartel said it would boost that ceiling by 2 million barrels to 25.5 million a day, and would boost it another half million barrels a day in August if oil prices don’t move lower by then. Total world demand currently stands at about 80 million barrels a day, with OPEC supplying about a third of that.

News of higher OPEC quotas did little to calm fears of shortages largely because the new quotas won’t add much new oil to world markets. The cartel's members already are exceeding their quotas by at least 2.3 million barrels a day, so the ceiling increase of 2.5 million barrels a day essentially legitimizes that overproduction.

U.S. light crude for July delivery fell 68 cents to settle at $39.28 a barrel in New York.

"The perception in the market is that we've been short-changed," said Nauman Barakat of brokers Refco in New York.

It’s also not clear just how much additional oil can be brought to market if prices don’t ease. Saudi Arabia is the only OPEC country with any additional capacity — estimates vary over just how much — but it only amounts to several million barrels a day.
Video: Fuel future

Some OPEC members, including Iran and Venezuela, are concerned that if the global economic expansion hits a snag, demand could dry up quickly, sending oil prices tumbling. Memories are still fresh of the rapidly spreading recession that hit Asia in 1998 — a major factor in an oil crash that sent crude prices tumbling to $12 a barrel.

"We believe there is not any shortage in the market and we should be very careful about the coming months," Iranian Oil Minister Bijan Namdar Zangeneh said in explaining the decision to raise the ceiling in two steps.

But traders and oil buyers are less concerned with inventories than they are with the threat of a terror attack interrupting supplies. In the past few months, attacks on pipelines and a major oil loading terminal in Iraq have underscored the vulnerability of that country's output of about 3 million barrels a day. More recently, Saudi Arabia has been the site of attacks at a refining complex in Yanbo and last Tuesday’s attack in Khobar that killed 22 people, mostly foreign oil workers.

“I don't think — unless we get some supply disruption — that the price is going to get much higher than this,” said Wren. “But it is a concern, so there has got to be an $8 premium in this oil, at least, in my opinion, due to the geo-political turmoil that is going on out there.”

Much depends on whether the growth in demand remains strong in China, now the second largest oil importer after the United States. Chinese officials said Thursday that recent efforts to cool the overheated economy are working. Though still high, money supply and loan growth were starting to ease and China's international balance of payments was roughly in balance, Liu Mingkang, head of the China Banking Regulatory Commission, told a national teleconference on economic policy.

But the risk remains that rapid inflation could turn China’s current boom into a painful bust. Beijing has worried that certain industries such as steel, cement and property are overheating and could threaten overall economic stability if strong investment is not brought under control.

China's economy grew 9.8 percent in the year ending in the first quarter, and the government is hoping to bring that down to a more sustainable seven percent.